Vicious competition should be avoided in bay area development

Source:Global Times Published: 2017/4/19 22:18:39

Coordination needed in bay area development

Zhou Linsheng Photo: Courtesy of Zhou Linsheng

Editor's Note:

The central government will consider development plans for the Guangdong-Hong Kong-Macao Greater Bay Area this year, Chinese Premier Li Keqiang said last week while granting the official certificate of appointment to Lam Cheng Yuet-ngor, the incoming chief executive of the Hong Kong Special Administrative Region (HKSAR). The statement was made not long after the bay area was included in this year's government work report. To understand deeper issues relating to the bay area, Global Times reporter Li Qiaoyi (GT) talked to Zhou Linsheng (Zhou), vice president of the China Society of Economic Reform and president of the Guangdong Society of Economic Reform, in an exclusive interview earlier in April.

GT: Can any comparison be made between the Guangdong-Hong Kong-Macao Greater Bay Area and the world's three major bay areas - Tokyo Bay Area, New York Bay Area and San Francisco Bay Area?

Zhou: There's still quite a gap between the Guangdong-Hong Kong-Macao Greater Bay Area and its three global counterparts, but the gap is narrowing. The Greater Bay Area is underpinned by sound infrastructure such as high-speed rail services, urban mass transit systems and highways, and is home to a sizable Internet sector. The Pearl River Delta, a mainstay of the Greater Bay Area, has over the years carved out a unique development model that sees government authorities at different levels playing a strong part in economic planning and investment, something rarely seen in the case of the three major bay areas. Meanwhile, the Greater Bay Area could be considered the most market-oriented region in China, with the markets playing a decisive role in the distribution of resources.

For example, Shenzhen's achievements in the fields of industry development, technology research and development, banking and finance, and culture and creativity have mainly resulted from adequate market competition rather than government planning.

GT: What lessons can be learned from the three major bay areas for the development of the Greater Bay Area?

Zhou: Within the bay areas in the US and Japan, there's a comparatively clear line between the government and the market. In China, however, one of the biggest problems with local governments is that they might get used to crossing their designated space. As a consequence, what's supposed to be an invisible hand that won't appear until the market doesn't work has often turned out to be excessively active, particularly in specific industries, and this to a certain extent hinders the functioning of the market.

GT: How should competition and cooperation between member cities in the Greater Bay Area be handled?

Zhou: Regional competition used to be translated into an internal driver of local economic growth across the country in the past. By contrast, the bay area economy essentially focuses on coordinating development and seeking win-win cooperation. This is of vital importance for the Greater Bay Area's economic development. Some of the member cities in the Greater Bay Area used to follow the path of "manor economies" and could easily fall into vicious competition for resources, projects and talent.

Along with the economic rise of these cities, they are more easily prone to undiversified development plans. This should be discontinued while developing the Greater Bay Area. Different member cities should crystallize their leading industries based on their resources, geographic advantages, and existing industry groundwork, so that there can be benign development that features differentiated competition, coordinated development and shared resources.

In addition, the Greater Bay Area is an area of strategic importance. Currently, national key economic areas such as the Yangtze River Delta and the Beijing-Tianjin-Hebei region revolve around pushing for synergistic development between neighboring provinces and cities falling under the same social mechanism, and the national Belt and Road strategy highlights win-win cooperation between different countries and regions.

The Greater Bay Area, for its part, aims to press ahead with concerted development between different social mechanisms and political mechanisms within the country. The pilot plan to develop the Greater Bay Area therefore makes sense not just economically, but also politically and socially. In terms of economic scale, Guangdong Province should play a steering role in developing the bay area, which is envisioned to become increasingly important as the time limit of 50 years is reached - the two basic laws of the HKSAR and Macao SAR both stipulate that the existing capitalist system and way of life will stay unchanged for 50 years.

GT: How should Hong Kong and Macao position themselves in the development of the Greater Bay Area?

Zhou: The two special regions still have apparent advantages and Hong Kong especially is expected to take a significant role in China's embracing of a new era of capital exports. As one of the biggest global financial hubs, Hong Kong remains the major gateway for foreign investment into the Chinese mainland and it can serve as the financial center for the Greater Bay Area. The city also retains an edge in shipping, particularly offshore shipping, which, adding to its strength in a variety of arenas including accounting, logistics, warehousing, insurance and legal advice, will be indispensible for the mainland to capitalize on various opportunities in countries and regions along the Belt and Road route. Macao is also unique in the Greater Bay Area, given its gambling and tourism sectors. And as a member of the Portuguese-language network, it can also help in pushing for the Chinese economy's expansion into other Portuguese-speaking countries and regions.

GT: What is the future focus of the Greater Bay Area and the newly launched Xiongan New Area?

Zhou: It's quite interesting that the two areas almost simultaneously hit the headlines. This perhaps indicates that the central government is keen on fostering balanced development across North China and South China. But the two areas will probably follow different paths. There are stronger market forces in the Greater Bay Area, while the development of the Xiongan New Area, a strategy crucial for a millennium to come, is envisaged to entail a massive amount of the nation's administrative resources. It's believed that in the early stages of developing the Xiongan New Area, State capital and State-owned enterprises will be the main force, just like the early stages of Shenzhen's development. The function and influence of the market, I would hope, will eventually become increasingly apparent in the case of the Xiongan New Area.